Paiute group reaping benefits from growing business empire

By John Rogers 

A relatively small group of Utah Native Americans has leveraged an opportunity suggested by a Cedar City information technology company into a burgeoning business empire. The Cedar Band of Paiutes now runs multiple business enterprises that contribute mightily to the advancement of members of its Southern Utah population.{mprestriction ids="1,3"}

In 2002, a small IT company based in Cedar City was looking for a Native American partnership and approached the Cedar Band. Band leaders were interested, but before a deal could be struck, the IT company went out of business. The possibility of joining the growing IT industry intrigued the band, and the leaders — with the help of a grant from Southern Utah University Rural Development and a $4,000 infusion of cash from the tribe — created Suh’dutsing Technologies, the first business venture of the Cedar Band Corp. Suh’dutsing is the Paiute word that represents “cedar,” a native tree of the area where the band is based.

Immediately after the company was launched — in October 2004 — the newly appointed staff of Suh’dutsing Technologies began soliciting business from federal agencies and IT companies in Washington, D.C. At a March 2004 Reservation Economic Summit, Suh’dutsing Technologies made a presentation to about 20 representatives of various federal agencies. The result was the infant company’s first contract, an indefinite delivery, indefinite quantity (IDIQ) pact with the Department of the Interior. The IDIQ is a type of government contract that provides for an indefinite quantity of services during a fixed period of time. But despite the uncertainty of the IDIQ, the business efforts of the Cedar Band Corp. were off and running.

Suh’dutsing Technologies spawned three other Cedar Band companies: Suh’dutsing Telecom, Suh’dutsing Staffing Services and Suh’dutsing & Tikigaq Services. With their headquarters in Cedar City and regional offices in Washington, D.C.; Maryland and Ohio, the enterprises employ over 200 people to the benefit of the entire tribal community.

The Cedar Band is one of five constituent bands of the Paiute Indian Tribe of Utah, people whose roots in Southwestern Utah stretch back thousands of years. Formal recognition of the Cedar Band and Cedar (Suh’dutsing) people came on April 3, 1980, with congressional passage of the Paiute Indian Tribe of Utah Restoration Act.

Today the band occupies a 2,200-acre reservation that stretches from the middle of Cedar City southward along the Interstate 15 corridor. 

In 2013, the Cedar Band of Paiutes decided to diversify its economic efforts by launching a mortgage agency. For the next three years — and without any outside investment — the band built CBC Mortgage Agency (CBCMA) into a company that provides down payment assistance to credit-worthy homebuyers. CBCMA is a federally chartered entity and the agency has helped thousands of borrowers achieve the dream of homeownership through its Chenoa Fund. 

More than half of CBCMA’s borrowers are African American, Latino or other minorities who lack the funds necessary to meet the down payment threshold to obtain an FHA-insured loan.

Also headquartered in Cedar City, CBCMA, the band’s technology companies and several other businesses owned by the band, now have operations in 14 states. Often overlooked, however, is how CBCMA directly benefits the tribal entity that founded and governs it, by serving as a vital source of employment and a reliable revenue generator.

Through the years, the band’s leaders have used distributions from CBCMA and other band enterprises to sustain essential government functions, preserve and promote band culture, and create and expand a wide variety of programs that benefit members. Revenues support medical and dental care benefits; anti-drug, tobacco and alcohol education; after-school tutoring; elder care programs; scholarships to help with college tuition; grants that enable tribal members to purchase off-reservation homes; and many other projects.

The Cedar Band Corp. has continued to build its business efforts with the addition in recent years of a defense contracting company called Suh’dutsing Aerospace; an award-winning wine distributorship in partnership with a Lodi Valley, California, winery; and a soon-to-open, full-service travel plaza near Cedar City.

The Cedar Band’s mortgage company has hit a bump in the road in recent weeks but has resolved to weather the storm. The Trump administration, in a move designed to prevent a housing crash similar to that of 2008-2009, issued, through the Department of Housing and Urban Development, a letter it called “informal guidance” concerning documentation required for borrowers using funds from another person or entity to cover part of the FHA’s minimum down payment requirement of 3.5 percent — the very thing that CBCMA does.

The new guideline would have prohibited national housing finance agencies owned by Native American tribes from providing down payment assistance to anyone except tribal members purchasing properties on their own reservation. That restriction would effectively put such organizations out of business.

“HUD’s appalling new guidelines put Indians back on the reservation and deal a heavy blow to Native Americans’ efforts to establish businesses that provide jobs and revenue for our people,” said Bobby Rowser, a board member of the Cedar Band Corp. “Let’s be clear. This painful government action will cause serious erosion of Native American progress toward self-determination.”

The Cedar Band of Paiutes filed a lawsuit seeking to prevent the government from implementing the new guidelines. Its suit says in part that the change represents “a radical shift in longstanding HUD policy that effectively outlaws CBCMA’s business and pulls the rug out from under many borrowers, who now will be unable to close on their home purchase.”

CBCMA further claimed that the HUD letter “unlawfully targets American Indian tribes and bands by prohibiting them from participating in home-purchasing assistance programs and thus threatens a critical source of revenue for the Cedar Band.” The lawsuit sought an order to immediately halt the policy’s enforcement on the grounds that it was adopted without issuing proper notice and opportunity for comment, and that it stands in violation of federal law.

Now, HUD has backed off its guidance, issuing a 90-day stay to review the policy in light of the Cedar Band’s claims. HUD announced two weeks ago that it was delaying the implementation of the new rules for FHA.

CBCMA’s lead counsel, Helgi Walker of Gibson Dunn & Crutcher, said the potential harm caused by HUD’s letter was staggering.

“We are pleased that the government understood the need to hit the pause button and return to the status quo for a period of time,” Walker said. “We remain confident that we will prevail in permanently rectifying this unlawful agency action.” 

The Cedar Band is particularly concerned about the HUD guidance’s potential effect on the continued success of its mortgage company in light of the benefits its profits provide to the tribe and the indigenous people of Southern Utah. The tribe listed youth programs, scholarship programs, elder-assistance programs, language study and research programs, cultural events, building and renovation efforts, work training and the financing of the band’s new travel plaza as possible casualties if the business of CBCMA were curtailed.{/mprestriction}